Expediency
White House officials have told us that President Bush intervened forcibly to convince an initially reluctant Federal Reserve to reduce interest rates. "There were some telephone calls from the White House to the Fed in which some very crude language was used."
Swoop, January 28th-February 3rd report
No emergency can justify a return to inflation. Inflation can provide neither the weapons a nation needs to defend its independence nor the capital goods required for any project. It does not cure unsatisfactory conditions. It merely helps the rulers whose policies brought about the catastrophe to exculpate themselves.
Ludwig von Mises
Swoop, January 28th-February 3rd report
No emergency can justify a return to inflation. Inflation can provide neither the weapons a nation needs to defend its independence nor the capital goods required for any project. It does not cure unsatisfactory conditions. It merely helps the rulers whose policies brought about the catastrophe to exculpate themselves.
Ludwig von Mises
posted by The Cunning Realist at Thursday, January 31, 2008
32 Comments:
Apparently von Mises wasn't keen on the benefits of liquidity as a mechanism for keeping the securities markets aloft.
So Bush is far more concerned about propping up the financial markets than he is about the effects of inflation on the country. And this should be surprising... why exactly? Inflation only hurts the little people - you know, the suckers who've managed to sock away a little money in their credit union savings account, or those losers who actually live paycheck to paycheck buying $3.50/gal gas and $6/gal milk.
The cursing part is a nice touch though.
swoosh...swoosh...swoosh...swoosh
For you TCR:
The commission's 400-page report concludes that the nation ''does not have sufficient trained, ready forces available'' to respond to a chemical, biological or nuclear weapons incident, ''an appalling gap that places the nation and its citizens at greater risk.''
http://www.nytimes.com/aponline/us/AP-Guarding-America.html
Politicization of the Fed? I find that hard to believe. That's as ridiculous as the politicization of the Dept. of Justice
Oh, wait. Never mind.
Why would this be leaked? The perception of Democracy is about all that was left. Do they just hope put off the catastrophe until after the election? Why would Bernanke want to make his future work even more difficult?
Will the candidates that are going to be left with this mess speak out?
Mr Naive.
You can't imagine how much better I feel after reading this. Thanks for the heads up. Go, Ben, go. :D
Rising prices for energy, insurance, metals, medical, gasoline, eventually wreck havoc on a companies balance sheet. At first you handle it, work harder, buy smarter, plan better, yet, eventually your long term planning can't keep up and you get caught in a vicious cycle. Yes, you have business yet your costs are so lumpy and erratic, and sales projections feast or famine, lead to long term fatigue on workers. I don't care what folks say, this stuff eventually seeps into profit and loss statements and are detrimental.
good luck to all
von Mises was right.
Bush Administration's only real positive achievements have been creation of wealth (even if nominal, even if concentrated in financial instruments), and domestic economics.
When Paulson started "marketing", and Bernanke caved in Sep (50 bps), it was clear they were willing to savage the dollar, and stoke inflation, to prop the markets up.
Bush learned from Dad: he wasn't going to endure a recession, and hand a purring economy over to a Clinton, again. So he tried to prop the markets, to keep the impression of wealth.
Ironically, had they just permitted the markets to adjust in 2007, they could have let steam off, allow a mild recession, and saved the dollar. And been positioned for goog economic health in second half 2008. And economics drives elections.
Now, they face a more severe recession, major inflation, almost handing the White House to the Dems. (Fortunately for Republicans, Obama and Clinton aren't quite FDR, in electability.)
Wow, TCR, you're "hitting" the big time.
http://bigpicture.typepad.com/comments/2008/01/quote-of-the--3.html
judyo
who/what the heck is Swoop? Can they/it be trusted?
I've never heard of them. I'm not saying it's untrue, it is just that I have no experience or knowledge of this source.
Can anyone enlighten me?
Neils: Swoop is legit. Good inside-the-Beltway type source.
Interesting aside... Volker endorsed Obama yesterday.
http://blogs.wsj.com/economics/2008/01/31/volcker-i-endorse-obama/
What I fail to understand is why the Fed would cave to THIS administration, at THIS juncture.
I really don't get it - I would have thought that these guys had zero influence with Bernanke, or anyone else, at this point.
So what if Bush is willing to use some "very crude" language - that and his approval ratings, plus $4.59, will get you a Tall Caramel Macchiato. If this story is true, it just shows how much you can still accomplish with an unbacked currency like the Bush Administration's bluster.
Bernanke and Bush =
Arthur Burns and Nixon.
"What I fail to understand is why the Fed would cave to THIS administration, at THIS juncture.
I really don't get it - I would have thought that these guys had zero influence with Bernanke, or anyone else, at this point."
You don't think the NSA has been limiting data collection to foreign nationals with funny names and theocratic agendas, do you?
It's safe to assume everyone of nominal influence has a dossier and the person holding that dossier has leverage.
AmConMag endorses Ron Paul.
http://www.amconmag.com/2008/2008_02_11/feature.html
What were they waiting for?
I've read in US News & World Report 'Whispers' that Ben is saying privately that the economy is in worse shape that he's let on publicly and that's the reason for the rate cut (not that it necessarily makes sense).
My take on it is that he's trying to avert a recession that's worse than the one we saw in the early 80s and is pursuing a kind of 'hair-of-the-dog-that-bit-you' approach. However, I'm not sure if you can equate a hang-over cure with the structural weaknesses in our economy (low-to-negative savings rates, an increase of our long-term debt of 150% [from 20 trillion to 52 trillion in just 7 short years], etc.).
"You don't think the NSA has been limiting data collection to foreign nationals with funny names and theocratic agendas, do you?
It's safe to assume everyone of nominal influence has a dossier and the person holding that dossier has leverage."
Just ask the democrats in Congress.
I a side note I was arguing with liberals at the huffington post today and ran into this guy. I had to quit posting because he was way...way...way...smarter than me and I couldn't possible improve upon what he said. Great history lesson.
http://www.huffingtonpost.com/users/profile/Republicae
First bush screaming at the Fed Chair and now this: http://www.thesmokinggun.com/archive/years/2008/0201081fat1.html
we need to quickly get our country's collective slope pointing in the positive!
Nice use of the Mises quote.
It's too bad most of America gets their view of economics from the likes of Paul Krugman and Ben Stein.
PS. Realist, I notice there are no archive links for your older posts.
Do readers find your older posts only by navigating the "Previous posts" links?
I spent several minuets trying to find the original article so I could link to it but could not find it.
Help please.
I don't understand how anyone can equate Ben Stein with Paul Krugman. David, what's your point?
In my view everyone have to browse on it.
this should be surprising. you have business yet your costs are so lumpy and erratic
This is all erroneous what you're writing.
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Thanks for your article, really useful information.
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